Earnings Release: Here's Why Analysts Cut Their Quipt Home Medical Corp. (TSE:QIPT) Price Target To CA$10.95

Last week, you might have seen that Quipt Home Medical Corp. (TSE:QIPT) released its third-quarter result to the market. The early response was not positive, with shares down 9.8% to CA$4.06 in the past week. Revenues were in line with expectations, at US$64m, while statutory losses ballooned to US$0.04 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Quipt Home Medical

Taking into account the latest results, the consensus forecast from Quipt Home Medical's seven analysts is for revenues of US$273.9m in 2025. This reflects a decent 12% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Quipt Home Medical forecast to report a statutory profit of US$0.035 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$280.2m and earnings per share (EPS) of US$0.10 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 8.8% to CA$10.95, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Quipt Home Medical, with the most bullish analyst valuing it at CA$16.25 and the most bearish at CA$8.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Quipt Home Medical's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Quipt Home Medical's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 9.6% growth on an annualised basis. This is compared to a historical growth rate of 32% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.9% annually. So it's pretty clear that, while Quipt Home Medical's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Quipt Home Medical. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Quipt Home Medical's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Quipt Home Medical going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Quipt Home Medical that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.